Small energy providers are offering the cheapest deals on the market in what experts claim is a threat to the big six suppliers.

Ovo Energy says that falling wholesale gas prices have enabled it to become the first supplier to offer an average annual bill below £1,000.

It said the latest cut on its 12-month fixed Better and Greener energy plans would bring the typical annual bill for a dual-fuel customer down to £998, compared with an industry average of more than £1,200.

Meanwhile, First Utility has launched the cheapest two-year fixed energy tariff in the market, at £1,095 a year until May 2016.

Stephen Fitzpatrick, managing director of Ovo, which has 280,000 customers, says: "Fair, transparent pricing will help consumers to trust the energy market again. That means when wholesale prices fall, customers shouldn't see prices being frozen, they should see them falling. Lower wholesale costs and recent government policy changes have meant that the cost of energy is lower now than it was 12 months ago. Bills should be too."

The six major suppliers – SSE, Scottish Power, British Gas, npower, E.ON and EDF Energy – make up 95% of the UK's energy supply market.

Jeremy Cryer, energy spokesperson at Gocompare.com, says: "People shouldn't overlook smaller energy suppliers. They have been very competitive on cost in recent times, often offering prices that are far keener than their larger counterparts, and this could pose a real threat to the big six by attracting customers away from them."

Research from price comparison site uSwitch.com claims consumers are waking up to the fact that smaller suppliers could offer a viable alternative, after service issues and price hikes.

As many as 72% of consumers would now switch to a small supplier, up from 56% a year ago.

More than three-quarters (78%,) of consumers who would consider switching would switch do it for cheaper bills, while 22% would move for better customer service. But 23% say they wouldn't trust a supplier they hadn't heard of.

Cryer says: "There's no need to fear moving to a smaller provider, and there's no risk of your energy being cut off simply by switching."